What is a common factor that results in an undersupply of wine?

• A. Good harvest
• B. Favorable weather
• C. Bad harvest
• D. Increased demand

Answer: (C)

The key factor driving an undersupply is a drop in production caused by a poor grape harvest. When a bad harvest occurs, fewer grapes are available, so the winery produces less wine. With demand that is constant or rising, that reduced output translates directly into a shortage in the market. In contrast, a good harvest or favorable weather increases yields and adds to supply, reducing the likelihood of undersupply. Increased demand can cause shortages if it outpaces supply, but it doesn’t reduce production itself; it shifts the balance by raising the amount people want to buy.